And just FYI, you can buy a refurbed iPod Touch 4g with 8 gb memory (excellent as a remote controller for such a system as we are talking about here) for $150, including the standard Apple warranty.
So getting back to the Pie, there are a couple of scenarios I'm imagining, but at this point I haven't seen anybody doing these things, so they are absolutely not tested and currently aworking approaches.
The first idea I have is to use the HDMI port for music data, instead of USB -- of course I have no idea yet if this will be an improvement or not over usb, but it does have that potential, especially given the current state of the usb kernel issues. HRT now has an HDMI dac that takes an HDMI signal in, strips the sound data out, reassembles the full HDMI packet and can send it on to the display. This dac also has two hdmi inputs, so you could still send the data from a dvd player or whatever, plus the music data source to it, and then still connect it to your monitor for the picture. It also does 24/192 PCM, but no idea if DSD will work in this scenario, but probably not, at least not with some serious programming effort.
The second option would be to use the HDMI port with and HDMI tospdif converter, and this will get you an spdif stream for feeding something like the BH dac, which has been said, at first will only have spdif input.
So, the raspberry pie with one of these options (hdmi dac or spdif converter), and a decent linear psu, should get some very nice results.
Of course the possibility of getting the usb issues fixed is pretty likely, so going to a standard usb dac, is also a possibility. One thing I think would make for a small, compact, very decent sounding dac, fed from a NAS for fileserver, and with a direct audio out, would be to pair the RP with something like the AQ dragonfly, or the new HRT MicroDAC, which is said to be somewhat better sounding than the dragonfly, and cheaper too at $189. 24/96, direct audio out, plus a volume controllled headphone out usign a digitally controled analog volume control, not dithering or bit dropping digital control. Again, the usb kernel issues would have to be addressed by the RP foundation before this will work beyond 16/44.1.
All of these solutions are based on receiving the data stream over ethernet from a fileserver or NAS, and as Tom has done, an RP will also make a fine fileserver using a usb hard drive for music storage., so even if you had no home ethernet network, you could build one of the dac/spdif options above, feed it from another RP as fileserver, connected with a piece of ethernet cable, and with a usb wireless adaptor connected to the fileserver for remote control. Relatively inexpensive,, probably a good deal less than even a basic mac mini with a cheap usb dac, and potentially better performance (given less hardware/processing complexity, and other things. Power supply quality will also figure pretty prominently in the final outcome as well.
Also, forgot to mention it, but the HRT HDMI dac is something like $230, so not terribly expensive as dacs go, and is said to have performance somewhere between the hrt musicstreamer II and musicstreamer II+, and as I said, full 24/192 capability.
Lots of potential here for sure, but none of this is really turnkey at this point and is going to take a good bit of experimenting, tweaking, maybe some hacking, and perserverance to get going, but when done, it should be as easy as distributing preconfigured SD cards with a custom image on them, and assembling the hardware, plugging it all in, andputting it all in some sort of enclosure if desired.
So for the computer timid, you could buy the hardware, and then get an image from one of us on an SD card, follow some basic setup instructions and be ready to go with a very high quality music streamer.
-- Jim